Beirut – The electricity file reduces the structure of corruption in Lebanon, according to many, which destroyed the country with suspicious deals. The ghost of darkness became the companion of the Lebanese people, for more than 30 years after the end of the civil war and the signing of the Taif Agreement in 1989, without promises to solve the electricity crisis and improve service it.
During this period, all political parties participated in the successive governments, and 16 ministers from prominent forces took over the energy and water portfolio, led by the Free Patriotic Movement (headed by Gibran Bassil), whose team ran the Ministry of Energy for 12 years, meaning that everyone was, at least, Witness the secrets of the electricity file, which accumulated Lebanon’s indebtedness. Read also German companies enter Lebanon on the port’s reconstruction line… Investment incentives or political messages from Europe? With the approach of lifting subsidies, what are the obstacles to the financing card to support poor families in Lebanon? Bale is not for all the poor… How did the collapse reverse the consumption pattern of the Lebanese?
Promises and darkness
In the past years, more than 10 electricity repair projects were submitted, in addition to tenders to bring in ships as a practical and temporary solution until the implementation of projects, some of which include the establishment of modern renewable energy plants.
Since the seventies, Lebanon has relied on thermal plants to produce electric power, which use fuels such as “fuel oil”, “diesel oil” or “gas oil” by importing them.
Thus, Lebanon generates most of the electrical energy through 7 thermal plants that were built successively before the year 2000: Jiyeh Factory (1970), Zouk Factory (1984), Tyre Factory (1996), Baalbek Factory (1996), Al-Harisha Factory (in 1996). 1996), Al-Zahrani Laboratory (in 1998), Deir Ammar Laboratory (in 1998).
After an era of not approving a sustainable solution plan, the electricity crisis has finally reached its climax, and the Lebanese live in almost complete darkness with the daily rationing hours rising for about 20 hours in some areas, due to the lack of fuel at the Electricité du Liban, and this comes on the impact of a historical collapse that threatens the country with scarcity of materials. Basically, at the forefront of fuels and medicine, with the imminent lifting of import subsidies provided by the government through the Central Bank, due to the depletion of the usable dollar reserves, at a time when the national currency (the lira) continues to collapse, surpassing the barrier of 15 thousand pounds against the dollar on the black market (the official exchange rate 1507 liras).
The last solution that constituted a temporary postponement of the comprehensive darkness, for a maximum of about two months, was with the exceptional approval issued by the President of the Republic, Michel Aoun, and the head of the caretaker government, Hassan Diab, a few days ago, to cover the treasury advance to the Electricity Corporation for the purchase of fuel, which economists considered additional pressure on what was left of dollars in use. How is the division manifested over the reality of the electricity crisis in this country?
Divide over the reality of the crisis
The Director General of Oil at the Ministry of Energy and Water, Aurour Feghali (close to the Free Patriotic Movement), links the electricity crisis to the tariff, which amounts to 8 cents per kilowatt, and after the collapse of the lira, its value became less than half a cent.
Feghali refuses to hold her ministry responsible for depriving citizens of electricity, because for years it has been making offers based on the establishment of renewable energy plants, such as Deir Ammar-2 and Zahrani-2, which need funding, but have not been approved by the Council of Ministers.
And if they had left EDL to equate the tariff price with the cost price, according to Feghali’s talk to Al-Jazeera Net, it would not have accumulated its debts, and the reason is the policy that has been imposed to prevent raising its tariff since 1994, at a time when the lira lost its value, and at that time the price of a barrel of oil was about 22 dollars, It is currently around $72, so fixing the price does not make sense in the world of economics.
On the other hand, experts link the electricity problem to the obsolescence of factories that incur a high cost of electricity production, amounting to more than 20 cents per kilowatt hour, while new plants can produce less than 3 cents, meaning that Electricité du Liban produces at a cost equivalent to 4 times the normal cost.
Feghali justifies the high cost of importing oil derivatives and heavy fuel to produce electricity, which is very expensive and is usually used only by oil-producing countries.
However, the former Director General of Investment at the Ministry of Energy and Water, Ghassan Beydoun, considers that the huge cost of electricity production is due to poor efficiency and internal waste, and because the old factories need to transfer “diesel” by tanks, such as the Tire and Baalbek factories, meaning that the cost of operating the factories is high, and it is wasted About 40% of electricity production is between technical waste and theft, in addition to about 10% delay in collection.
Beydoun points out that Electricity of Lebanon provides about 1,000 megawatts per day, while the country needs to provide about 3,200 megawatts within 24 hours.
He describes giving an advance to the Electricity Corporation as “a heresy and deception” in terms of its lack of sustainability, or the inability of the Corporation to pay its debts.
History of the crisis
In his speech to Al-Jazeera Net, the former director of the Ministry of Energy tells some of the reasons that brought the matter to this point. Before 2002, the electricity situation was relatively good, due to the construction of two new plants, Deir Ammar and Al-Zahrani. In the same year, the Electricity Sector Regulation Law (No. 462/2002) was issued, stipulating how the private sector should be involved in the electricity production process, through the appointment of a sector regulatory body. But the commission was not appointed, and its task was to give licenses and permissions to the private sector.
He considers that the lack of enforcement of the law is caused by the lack of transparency resulting from what is described as “suspicious deals” in the Ministry of Energy.
After phases of political confusion, a wave of assassinations, and the July war (2006), the situation was relatively stable in 2010. When Basil was Minister of Energy, he presented a paper “Electricity Sector Policy” that included a vision for solutions that seemed optimistic, such as building new plants, and focusing on renewable energy, according to Baydoun.
At the time, the government stipulated, according to him, that the law be applied to implement the terms of the paper, and it took about 4 years for a transitional period, so it was approved to lease the ships, then it approved granting the Ministry of Energy one billion and 200 million dollars, in order to build factories with a capacity of 700 megawatts, and to appoint the regulatory authority and the board of directors for electricity.
However, this was not implemented, as a result of the exclusivity and disregard for the laws, and the commission of errors in the construction of laboratories, which resulted in arbitration cases that have not yet ended.
Beydoun considers that Lebanon missed a historic opportunity, and it was assumed, in 2015, that electricity would be available 24 hours, and that the private sector would start to contribute to production, but it did not start and the electricity did not come.
He points out that the country incurs an annual electricity deficit of about two billion dollars, as a result of overburdening the institution with the cost of ships and service providers, and reliance on maintenance companies and operating factories, which resulted in the depletion of its finances. State finances and Electricity of Lebanon went bankrupt, and if the country went to use gas, it would save $400 million annually.
It is mentioned that the Electricity Corporation should not originally need to borrow, because it is an independent institution. According to its system, it could choose the best means of production, and adopt a tariff that covers its costs, with a profit margin, to ensure its continuity, which would have exempted the state from any assistance.
Generators and social cost
For his part, researcher and professor of economics at the American University of Beirut, Jad Shaaban, goes to the societal cost of electricity, which ranges between 3.5 and 4 billion dollars, between the state electricity bill and the bill for private generators, which the Lebanese participate in to provide alternative electricity during the hours of rationing.
And annually, the bill paid by the Lebanese for private generators exceeds one billion and 700 million dollars. The researcher believes, in a statement to Al-Jazeera Net, that electricity is one of the most corrupt files, and that billions of dollars, which were spent on the sector during 30 years, should have been spent on improving it at a reasonable cost, instead of going to waste, instead of monopolies and charging citizens the cost of securing self-electricity, Through private generators, from the same sources as the monopoly on hydrocarbons.
Shaaban points out that Lebanon loses about $200 million annually, in economic, social and environmental costs due to electricity cuts and factories that operate without environmental conditions that cause pollution, not to mention lost opportunities, estimated at 2 to 5% of the value of funds annually to the Lebanese community.
So what is the solution?
Many agree that the solution to the electricity file is not only technical, but requires a decision to lift the political hand from the sector, in order to implement the required reforms, such as stopping deals, using gas and producing electricity at a lower cost.
Hence, Shaaban considers that there are necessary measures for a solution, including:
First – Inclusion of offers to produce electricity in a way that preserves the rights of the Lebanese without brokering and corruption.
Second – Bringing ships at serious prices to fill the current production gap, as an urgent and temporary solution, to reduce the high cost incurred by the Lebanese on private generators.
Third – the sustainable solution is to change the electricity insurance policy, by resorting to renewable energy, improving the collection mechanism, restructuring the Electricity Corporation at the administrative level, and forming the regulatory body.
For his part, Baydoun considers that the best solution is to go towards alternative solar energy, especially since in 2019, a law was issued by Parliament (No. 129), in which it was extended to the Council of Ministers and the Ministers of Energy and Finance, giving deadlines for investment in solar energy, and mentions other solutions, including: appointing a president New to the Electricity Board of Directors and the Regulatory Authority, within a two-month period without waiting for the amendment of Law 462/2000, and for the Electricity Corporation to start raising the tariff for energy sales at the Corporation, and to expedite the collection of its overdue bills, otherwise the total darkness will be an inescapable fate